Sprout Social (NasdaqCM:SPT) - Share price, News & Analysis

SPT fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	2/6
Past Performance	0/6
Financial Health	6/6
Dividends	0/6

SPT Stock Overview

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.

Rewards

Revenue is forecast to grow 27.74% per year

Risk Analysis

Earnings are forecast to decline by an average of 2.2% per year for the next 3 years

Currently unprofitable and not forecast to become profitable over the next 3 years

Volatile share price over the past 3 months

Sprout Social Competitors

Elastic

NYSE:ESTC

US$5.4b

SPS Commerce

NasdaqGS:SPSC

US$3.8b

Workiva

NYSE:WK

US$3.6b

New Relic

NYSE:NEWR

US$2.9b

Price History & Performance

Summary of all time highs, changes and price drops for Sprout Social
Historical stock prices
Current Share Price	US$44.07
52 Week High	US$145.42
52 Week Low	US$38.39
Beta	1.49
1 Month Change	-38.93%
3 Month Change	-35.20%
1 Year Change	-31.14%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	165.48%

Recent News & Updates

May 04

Sprout Social: You Won't Regret Buying The Dip

Shares of Sprout Social dipped more than 10% after reporting Q1 results, despite beating Wall Street's expectations. The company raised its growth outlook for the year and is expecting robust 34-35% y/ growth over FY21. Sprout Social remains a competent player in a nascent market for social media management tools, and addresses a large >$50B TAM. It is also close to hitting breakeven on a pro forma operating margin basis. The company's ~11x forward revenue multiple is reasonable for Sprout Social's growth profile.

Shareholder Returns

	SPT	US Software	US Market
7D	-7.2%	0.3%	2.7%
1Y	-31.1%	-9.0%	-8.1%

Return vs Industry: SPT underperformed the US Software industry which returned -10.7% over the past year.

Return vs Market: SPT underperformed the US Market which returned -10.8% over the past year.

Price Volatility

Is SPT's price volatile compared to industry and market?
SPT volatility
SPT Average Weekly Movement	14.4%
Software Industry Average Movement	11.5%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	2.9%

Stable Share Price: SPT is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 14% a week.

Volatility Over Time: SPT's weekly volatility (14%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

Founded	Employees	CEO	Website
2010	887	Justyn Howard	https://www.sproutsocial.com

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It provides cloud software that brings together social messaging, data, and workflows in a unified system of record, intelligence, and action. The company offers provides various integrated tools in a range of functions comprising social engagement/response, publishing, reporting and analytics, social listening and business intelligence, reputation management, employee advocacy, and automation and workflows.

Sprout Social Fundamentals Summary

How do Sprout Social's earnings and revenue compare to its market cap?
SPT fundamental statistics
Market Cap	US$2.37b
Earnings (TTM)	-US$32.09m
Revenue (TTM)	US$204.47m

11.7x

P/S Ratio

-74.8x

P/E Ratio

Is SPT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SPT income statement (TTM)
Revenue	US$204.47m
Cost of Revenue	US$50.78m
Gross Profit	US$153.69m
Other Expenses	US$185.78m
Earnings	-US$32.09m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-0.59
Gross Margin	75.16%
Net Profit Margin	-15.69%
Debt/Equity Ratio	0%

How did SPT perform over the long term?

See historical performance and comparison

Valuation

Is Sprout Social undervalued compared to its fair value and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

16.81x

Price to Book (PB) ratio

Share Price vs. Fair Value

Below Fair Value: SPT ($44.07) is trading above our estimate of fair value ($35.67)

Significantly Below Fair Value: SPT is trading above our estimate of fair value.

Price To Earnings Ratio

PE vs Industry: SPT is unprofitable, so we can't compare its PE Ratio to the US Software industry average.

PE vs Market: SPT is unprofitable, so we can't compare its PE Ratio to the US market.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SPT's PEG Ratio to determine if it is good value.

Price to Book Ratio

PB vs Industry: SPT is overvalued based on its PB Ratio (16.8x) compared to the US Software industry average (3.6x).

Future Growth

How is Sprout Social forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-2.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPT is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: SPT is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: SPT is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: SPT's revenue (27.7% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: SPT's revenue (27.7% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SPT's Return on Equity is forecast to be low in 3 years time (0.5%).

Past Performance

How has Sprout Social performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-5.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SPT is currently unprofitable.

Growing Profit Margin: SPT is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: SPT is unprofitable, and losses have increased over the past 5 years at a rate of 5.7% per year.

Accelerating Growth: Unable to compare SPT's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SPT is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (29.6%).

Return on Equity

High ROE: SPT has a negative Return on Equity (-22.48%), as it is currently unprofitable.

Financial Health

How is Sprout Social's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: SPT's short term assets ($226.8M) exceed its short term liabilities ($107.3M).

Long Term Liabilities: SPT's short term assets ($226.8M) exceed its long term liabilities ($20.4M).

Debt to Equity History and Analysis

Debt Level: SPT is debt free.

Reducing Debt: SPT had no debt 5 years ago.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable SPT has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: SPT is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 56.2% per year.

Dividend

What is Sprout Social current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate SPT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SPT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SPT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SPT's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as SPT has not reported any payouts.

Next Steps

Explore strong dividend paying companies in the Software industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure

CEO

Justyn Howard (41 yo)

12.08yrs

Tenure

US$5,614,415

Compensation

Mr. Justyn Russell Howard is a Co-Founder of Sprout Social, Inc. and serves as its Chief Executive Officer and Director since April 2010. He serves as Chairman at Sprout Social, Inc. since December 28, 202...

CEO Compensation Analysis

Compensation vs Market: Justyn's total compensation ($USD5.61M) is about average for companies of similar size in the US market ($USD5.45M).

Compensation vs Earnings: Justyn's compensation has increased whilst the company is unprofitable.

Leadership Team

Experienced Management: SPT's management team is considered experienced (4.8 years average tenure).

Board Members

Experienced Board: SPT's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/17 00:00
End of Day Share Price	2022/05/17 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31